ML20065K372
| ML20065K372 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 10/31/1990 |
| From: | Curran D HARMON, CURRAN, SPIELBERG & EISENBERG, LLP., NEW ENGLAND COALITION ON NUCLEAR POLLUTION |
| To: | Scinto J NRC OFFICE OF THE GENERAL COUNSEL (OGC) |
| References | |
| CON-#490-11006 OL, NUDOCS 9011270098 | |
| Download: ML20065K372 (4) | |
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'tfuc"NumNsTnN KATHERINE A. mER october 31,1990 i
Joseph Scinto, Esq.
Office of General Counsel U.S. Nuclear Regulatory Commission
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Washington, D.C. 20555
SUBJECT:
Seabrook Decommissioning Bond
Dear Mr. Scinto:
You may recall that I called you a few months ago to verify a report I had received, to the effect that EUA Power had obtained the release ofits $10 million decommissioning bond for Seabrook, in order to make an interest payment due in May of 1990. After making some inquiries, you called me back to inform me that you knew of no such release.
I recently received a copy of EUA Power's " Form 10 0," filed with the Securities and Exchange Commission on August 14,1990. The report states at page 6 that EUA Power made a May 15,1990 interest payment "with proceeds from short term borrowings from EUA 'EUA Power's parent company) and the release of a $10,000,000 decommission-ing fund (wilch had been established by GUA Power to secure its Seabrook obligations with respect to up to $10 million of decommissioning ex in exchange for a guaranty of that obligation by EUA." penses and any cancellatio
. A copy of the relevant pages is enclosed.
As you know, eight months ago the Commission denied IAtervenors' motion for a stay of full power operation of the Seabrook reactor, based in part on the existence of a l
$72.1 million surety bond issued by the Aetna Casualty and Surety Company. CLI 90 3,31 NRC 219,259 (1990). The statements made in EUA Power's Form 10-0 raise obvious questions as to whether the bond is still effective. I would a soon as possible regarding the status of the security bond ppreciate hearing from you as Sincerely, C
lane Curran ec: Seabrook service list 901127009g 901031 gDR ADOCK 05000443 PDR,'
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1 i e FORM 10-0
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SECURmES AND EXCHANGE COWWISSION
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Washington, D.C..%9' '
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(Matt one)
(X) OVARTERLY REPORT PURSUANT TO SECTION 13 QR 15(m OF THE SECURmES i
ACT OF 1934 4
i June 30, t990 I
For the guarterty ported onced OR i
() TRANSITION REPORT PURSUANT TO SECTION 13 OP 16(d) OF THE SECUR l
4 ACT OF 1934
][CEly%,g rn to For the tranatoon perted from s
Came% Fita Numhar 13 1De7t g,g,
EUA POWER CORPORATION /v I W Nseg, $ggy,
~ ""' W (Exact name of registrant as specent m sts charter) i 02-0396811 New Hampshire l
(State or other prtetscoon of (i.R.S. Emp6 oyer leentifncapon No.)
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incorporanen or organtaston)
Forty Stark Street, P,0, Bot 326 03105 t
l Manchester, New Hampehre (Addresa of prtnopal troo.ittve offices)
(Zip Code)
(617)367-9690 Registrant's telephone nurfber lncludog area code In$ cats by check mark whether the reg!strant (1) has filed all reports required to be Ned by Section 13 or 1S(d) of the Securfues Exchange Act of 1934 during the preceding 12 rnonths (or for such l
shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days, YES X
NO laGcate the nurrcer of sharse outstanding of each of the issuer's classes of common stock, as of the.
latest precocal cate.
Outstandng at July 31,1990 Class I
10,000 shares
. Common Shares. 8,01 par value i
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!bte B - Ccntingeacies -- (Ccntimed) to thit No.
1, to certain issues with respectthe continued effective-l appeals relating tAich, if adversely decided, cculd irpact ness of the 1.icense.
':he Cocpany cannot predict the cuteeme of
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these proceedings.
EUA Pcwer's Seabrock interest:
1986, EUA Pcwer has pr ncipally-Since-its inception on !bvenber 2; 5
been engaged in the accruisition anc *inancing of its 12.1. ownership
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j El'A Pcwr Under the Seabrock Joint Nnershia Agreement, pay for its share of interest.
is required to accept its share of pcuer ance EUA's all operating costs of power generated frcm the project.
1 recovery of its investment in EUA Power is continge share of the pcwer generated by Unit 1 at prices sufficient to recov-er its investment.
EUA Power is actively earketing its Seabrook capacity in 'hw England Demand for electricity in New England has been exceed-New En6 and Power Pool planners,
and New York.
1 ing projecticris in recent years.
have projected that with a conservative annual grwth ra:e of 2%,-
anuunts of additional generating capacity beyond that Seabrook Unit 1) will be required by the significant already planned (includin6 mid-1990s.
EUA Pcuer believes that it will ultimately enter into long-tem sales contracts at prices sufficient to recover its invest-ment, although it cannot predict the timing of :these contracts.
Upon ecutnercial operation of Seabrook, it is likely that EUA Pcuer will be selling short-term capacity at rates lower than its actual costs.
Beginning in Fey 1988. EUA Pcuer code a successful exchange offe 15, 1991, 17-1/21 Series A Secured Notes due tbvenber to which EUA Power currently has cutstanding $180,000,000 for aU of it':
of 17-1/2 Series B Secured !btes due pursuant (the full authorized arount) 15, 1993 and $99,597,200 (cut of $100,000,000 authorized) of 15,1992 (collectively May /21 Series C Secureo tbtes due NovenberThe terms of the tbt 17-1 the !btes).
paid in cash or additional' Series C tbtes.
that interest may be During 1989 and 1988 all interest was paid by the issuance of Series of the interest C tbtes in lieu of cash at a rate equal to 133 which wculd otherwise have been paid in cash.
Althcugh EUA Power expects to e,enerate sufficient revenues in the
" frcxn Unit (b. I to pay interest.
future frcxn the sale of electr.
e available for payment of the on the !btes, no such revenues s Accordingly, EUA Pcwer interest installment due on May b,1990.
- sought, R
Ccepany, Eastern Utilities Associates (EUA)1990 J
and its parent under the Public Utility Holding any 3
and on April 30, Exchange Ccx: mission (SEC)Act of 1935 for several proposed f led s
e 15, 1990 r
EUA Pcwer to pay in cash the Mayshould enable EUA Pcwer to 15, 1991 including paycent requirecents for the period through May -
Note 3 - Contingencies -- (Centinued) in cash of the interest to became due on the Notes.
Utilizing part l
15, 1990 interest of the SEC authorization, EUA Power made the May with proceeds fmn short-term borrevings frca EUA and the j
payment deemmissioning fund. (which had been estab-release of a S10,000,000 EUA Pcuer to secure its Seabrook obligations with respect lished by $10 million of deccmid.ssioning expenses and-any cancella-to up to in exchange for a guaranty of that obligation by EUA.
tion costs)
J Other financing _ transactions authorized by the' SEC include capital 1
contributions and open-account advances by EUA, and short-term bor-j rcwings by EUA Power from others which would be guaranteed by EUA.
on the amunt of financing frca
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vich an overall limit of $75,000,000 external sources through one or any ccxibination of the authorized EUA is under no.
transactions to be outstanding at any one time.
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obidgation to cake any further loans or any capital contributions or open-account advances to, or to purchase any stock frta, EUA Power, or to guarantee any of its obligations.
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As part of the 1988 exchange of Notes, EUA Power also offered Contin-gent Interest Certificates evidencing the right to receive addition--
i al payments contingent upon and measured by EUA Power's inccme in Addi-certain years following the caamercial operation of Unit.1.
tionally, as of - June 30, 1990, EUA Power has issued $63,090,000 of 252 preferred stock ($100 par value) to EUA.
Should EUA Power be J
unable to ultimately enter into long-term sales contracts which provide sufficient revenue to cover its costs, EUA Power may be unable to make interest payments, and to make princiaal payments, on its Notes described above.
Such Notes are solely tw caligation of EUA Power and are not guaranteed by EUA or any other person.
Accounting mange Effective January 1,1988. EUA Power implemented Financial Account-ing Standard No. 90 (FAS 90) "Re ted Enterprises - Accounting for Abanderments and Disallevances o Planc Costs." FAS 90, amng other things, requires that Allowance,for Rnds 'Used During Construction I
(AWDC) should be capitalized only if its inclusion in allowable coses for rate making purposes is probable.
As discussed above, EUA 1
Powr has not encared f.nto any power contracts for' the sale of its share of the electricity to be generated by Seabrook Unit 1, there-i fore, it is uncertain at this time whether all of its allowable i
costs will be recovered.
'Ihus, FAS 90' mandates that the recording -
of a portion of AWDC for financi.al reporting _ purposes' be deferred.
If and when EUA Power enters into long-term power sales contracts at i
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prices sufficient to recover its investment, all or a portion of any restored to earnings.
For the AWDC previously deferred may be twelve conths ended June 30, 1990, the deferral of AWDC reduced EUA Powr's net inccxne by $27.9 ud.111on.
Since the inplementation of FAS 90 through June 30, 1990, approximately $58.8 mil.. ion of AFUDC related to EUA Power's investment. in Unit I has been deferred.
Additional a:: cunts of AWDC will be deferred until the ccemercial operation of Seabrcok.
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